nep-cfn New Economics Papers
on Corporate Finance
Issue of 2010‒05‒02
three papers chosen by
Zelia Serrasqueiro
University of the Beira Interior

  1. The Role of Bond Finance in Firms' Survival During the Asian Crisis By Marina-Eliza Spaliara; Serafeim Tsoukas
  2. The Use of Technical Analysis by Fund Managers: International Evidence By Menkhoff, Lukas
  3. Changing Perceptions of Maturity Mismatch in the US Banking System: Evidence from Equity Markets By Andrew T. Young; Travis Wiseman; Thomas L. Hogan

  1. By: Marina-Eliza Spaliara (Loughborough University); Serafeim Tsoukas (University of Nottingham, Hong Kong Institute for Monetary Research)
    Abstract: In this paper we assess the effects of bond financing on firms' survival during the 1997-98 Asian crisis. Using a novel database covering the period 1995 to 2007 for five Asian economies most affected by the crisis - Indonesia, Korea, Malaysia, Singapore and Thailand - we find strong evidence that the Asian crisis affected both directly and indirectly (through interactions with financial indicators) the probability of survival. More importantly, we show that bond issuers, irrespective of the currency denomination, are more likely to survive compared to non-issuers. Nevertheless, only firms issuing bonds in local currency are shielded from the adverse effects of the crisis.
    Keywords: Bond Financing, Financial Crisis, Firm Survival, East Asia
    JEL: F32 F34 G15 L20
    Date: 2010–02
  2. By: Menkhoff, Lukas
    Abstract: The use of technical analysis by financial market professionals is not well understood. This paper thus analyzes survey evidence from 692 fund managers in five countries, the vast majority of whom rely on technical analysis. At a forecasting horizon of weeks, technical analysis is the most important form of analysis and up to this horizon it is thus more important than fundamental analysis. Technicians are as experienced, as educated, as successful in their career and largely just as overconfident in decision-making as others. However, technical analysis is somewhat more popular in smaller asset management firms. What we find most significant is the relation of technical analysis with the view that prices are heavily determined by psychological influences. Consequently, technicians apply trend-following behavior.
    Keywords: fund managers, technical analysis, fundamental analysis, personal characteristics, investment behavior
    JEL: G14 G23
    Date: 2010–04
  3. By: Andrew T. Young (Department of Economics, West Virginia University); Travis Wiseman (Department of Economics, West Virginia University); Thomas L. Hogan (Department of Economics, George Mason University)
    Abstract: US banks are thought to have become increasingly fragile and exposed during the lead-up to the recent financial crisis. However, commercial bank leverage actually decreased during this period. To resolve this discrepancy, we explore another dimension of bank balance sheets: the effective maturity mismatch between assets and liabilities. Although banks assets are generally longer in term than their liabilities, we find evidence of a structural break in the mid-1990s when equity markets begin pricing banks as relatively longer-funded. Categories of bank assets such as real estate loans (i.e., mortgages and MBSs) and consumer loans were perceived as having become effectively shorter-term.
    Keywords: maturity mismatch, effective maturity, commercial banks, GSEs, Fannie and Freddie
    JEL: G21 E44
    Date: 2010

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